This episode of the Art of Value Show is a live recording from the bi-annual VeraSage Symposium, which was in Boston, MA. The distinguished panelists or VeraSagi are Ron Baker, Ed Kless, John Chisholm and Kirk Bowman. This episode will be rebroadcast on The Soul of Enterprise with Ron & Ed and Pricing Power by Steve Major.
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- What is the future of value pricing?
- Ron Baker – It is incredibly bright and optimistic.
- Pricing is now a profession and a C-Suite function.
- Professional Pricing Society conferences are global with the US leading the way.
- Because pricing is becoming so specialized, it is too focused.
- The death of the billable hour is not within reach, but it is within sight.
- Hourly billing has no enemies but is intensely disliked by its friends.
- Ed Kless – There are a lot of people trying to make pricing too much science, rather than art.
- John Chisholm – Pricing has to be a core competency in business school.
- Law firms are still challenged by value pricing and it is the exception rather than the rule.
- Value pricing changes everything about your business.
- It is a management innovation, not a just a business model.
- In technology, there is a group that is ready for something different, but they do not think business should be that hard.
- Change is occurring with the firms who are receptive.
- Ed Kless – Value pricing can end project management as it is known today.
- Earned value is a 9-step process to compute value that is being taught to project managers.
- The predictive market is an idea where people “gamble” on when a project ends.
- Project management is being made too complex.
- ROWE is a results-only work environment: Every position in an organization is defined by the results that are expected to be achieved.
- Leaders do not want to define roles by results because it is too hard.
- Measuring the input is an illusion of control.
- Thomas Bowden – Is pricing art or science?
- Tim's Vermeer used scientific techniques to create art.
- Ed Kless – The real concern is that once you input numbers, people believe then that it must be scientific.
- Ron Baker – It is not 100% art. You need some numbers behind it, but you still need judgment.
- Wes Higbee – What is the connection between price and purpose?
- There is a level of competitiveness involving purpose.
- John Chisholm – There is something more important than money.
- The big corporations are starting to tap into social responsibility.
- Ron Baker – Wealth gives us the freedom to be more purpose driven.
- It is more prevalent for knowledge workers to look for a purpose now.
- Conscious Capitalism, by John Mackey, CEO of Whole Foods, has an analogy for profit: it is like red blood cells in your body.
- Ed Kless – Corporate responsibility seems to be more marketing hype rather than reality.
- In the professional sector, most people come to their profession for a purpose, not for profit.
- Ed Kless – It is astrology to measure profit per year and offer discounts at the end of a month.
- The market pays you what you think you are worth.
- Andrew Belack – How can we price complex financial planning?
- He is going to offer more robust financial pricing and asked for help.
- Ed Kless – Be sure to offer choices.
- Kirk Bowman – Show his pricing to others and get their feedback.
- You never get paid a price you did not quote.
- Ron Baker – Everyone sucks at pricing themselves.
- Chris Farmand – How can we recruit the next generation of knowledge workers?
- Ed Kless – The nay-sayers cannot be ignored to save the next generation.
- John Chisholm – Asks his trainees why they did law in the first place; half answer that they do it for justice and the other half do it for profit.
- He sees them being manipulated by the system, but if their sole purpose is to make money, probably no one can help them.
- If they want something greater, then they can be helped.
- Ron Baker – The generalization by age is bunk; it is not an age thing.
- The Millenials understand they are knowledge workers, not service workers and see no connection between inputs and value.
- Do not discount laziness as a reason not to embrace value pricing.
- Once someone experiences a value pricing firm, the employee is not going to want to leave.
- Andrew Robertson – What are some misconceptions about value pricing?
- Many believe that value pricing is about charging more, or is about a fixed-price agreement.
- Now is the time to look for new ways because of the disruption that is happening in Australia.
- Technology, automation, and outsourcing are hammering future profits.
- What is your favorite takeaway from the VeraSage Symposium?
- John Chisholm – Aligning compensation models with the value you are creating.
- Do not complain about being shackled by the billable hour, while enabling the behavior by continuing to accept bills that exceed the estimate or fixed fees that are not fixed.
- Ed Kless – The only thing he underlined in his notes is the word, flourishment: we want people to live their dreams.
- Ed Kless – Time is not money, but money is time: it represents our discretionary time and how we can choose to use it.
- Ron Baker – Proud that you can have a discussion about the link between digestive problems and time sheets.
- Kirk Bowman – The idea of how your business is a value economy; i.e., how do you compensate your team when they see how you price your customers?
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